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Low pay not keeping up

IPFW researcher says people will vote with their feet

The Journal Gazette

The old argument that Fort Wayne’s low cost of living justifies lower wages in the area doesn’t hold up, a local market analyst says.

Ellen Cutter, director of the Community Research Institute at IPFW, said Allen County continues to lag behind state and national annual pay with the average employee making $39,803 in 2012. The disparity continues to put the county – and Fort Wayne – at a disadvantage, she said.

The cost of living in Allen County isn’t so out of whack that it warrants an annual average wage nearly $10,000 below the rest of the nation, Cutter said.

The disparity in annual average salaries was included in Allen County Insight, a report the Community Research Institute released to the county commissioners this month.

“Our ability to compete for workers, particularly for workers who have credentials, is a real concern for the region,” she said. “People will just vote with their feet and move to a market where the cost of living is about the same, but the pay is better.”

Cutter said the situation is hard on companies that want to hold down costs, particularly with the Affordable Care Act looming.

“It’s tough,” she said.

The institute’s findings come just ahead of the Northern Indiana Economic Forum that will address employment and workforce-related issues during an invitation-only event Aug. 30.

The forum is sponsored by accounting firm Crowe Horwath, payroll services provider ADP and Old National Bank. They sponsored a similar meeting in April that about 150 people attended. Organizers expect the same attendance this month.

When the leaders of business and industry have their get-together, Angela Wilson hopes they keep the rank-and-file in mind. She has been a nursing assistant for two decades. While Wilson appreciates her job, she also would appreciate more money.

“Definitely. Just as soon as my daughter graduates from high school, I’m moving to Alabama,” said the 38-year-old Fort Wayne mother. “It just seems like they don’t want to pay you here. I have friends in Indy and they make more than me and we’re doing the same thing. I think it’s especially hard on blacks.”

The numbers back her up.

Recent figures from the Community Research Institute found the median income in Allen County among blacks trailed that of whites between 2009 and 2011. Blacks earned $28,506, whites, $52,160.

“Something’s just not right there,” Wilson said.

Union leader Tom Lewandowski said if the business leaders wanted to really explore workplace concerns they’d have people like Wilson at the table.

“This is a closed discussion, and the people in the room who need to be there, aren’t there,” said Lewandowski, president of the Northeast Indiana Central Labor Council AFL-CIO. “Forums like this give the impression of being for the public good when they have nothing to do with the public.”

Tom Jones doesn’t agree. He is a managing partner in the Fort Wayne office of Crowe Horwath.

“The whole intent is to educate and to keep our clients up-to-date with what’s happening in the business and economic environment,” Jones said. “It’s really more of an educational seminar.”

Mike Meyer is executive vice president BRC Rubber & Plastics Inc. His Churubusco company is investing $365,000 as it moves its headquarters and research-and-design technical center to Fort Wayne before year’s end. Meyer won’t attend the forum but is interested in learning the participants’ thoughts on the Affordable Care Act, which will require businesses with 50 or more employees to provide health care coverage or pay a penalty.

“We’re hearing that health care costs could go up to at least 38 percent for companies,” he said. “We don’t know what to expect and will just have to wait and see. We will have to raise prices, but that can’t happen overnight because we have long-term customer contracts. We are prepared, but there is still a lot of uncertainty.”

BRC designs, develops, tests, validates and manufactures rubber and plastic parts for customers, including Ford, Chrysler and Nissan. The company expects annual sales this year to reach $83 million.